This study explains how small operational differences support excellent granulation in aerobic granular reactors. Short settling time promoted granulation in AGS reactor. Gene expressions based on mRNA revealed much higher ammonium monooxygenase (amoA) in conventional reactor biomass than in the aerobic granular reactor (AGS) biomass during a complete cycle operation. The number of glycogen accumulating organisms in conventional was much higher than in the granular reactor. The denitrifying functional genes in the granular systems were upregulated in anaerobic and aerobic phases. The granular reactor removed 1.84 kg CODm- (3)day(-1), 0.09 kg NH4+-N-m(-3)day(-1), and 0.063 kg PO43-P-m(-3)day(-1). The conventional reactor removed 1.14 Kg-m(-3)day(-1) COD, 0.05 kg-m(-3)day(-1) NH4+-N, and 0.028 kg-m(-3)day(-1) PO43--P. The granular reactor showed faster kinetics for nutrient and organics removal compared to the conventional reactor. Flocs in the conventional reactor had a lower abundance of Candidatus accumulibacter sp. and higher relative abundance of Candidatus competibacter.